Ironman is steadily increasing its entry fees. I recall Ironman Arizona used to be $600 or even $575? Now it's $700.

A sudden increase in entry fee is a bad move from a public relations perspective (recall what happened to the IM NYC race). Instead, increase the number of races until the market saturates, and this is exactly what WTC is doing.

Let's say you increase it to $1,000. I think sportsstat once said that, at any given IM, there are 35-40% first time IMers. How many of those first timers would consider doing an IM if they knew, when they first started doing tris or would even consider doing an IM or get into tri at that price point? In the immediate future, you may still be able sell out quickly, but in the long term, you've just prevented new customers from entering your store. There is also the psychological affect of selling it just cheap enough that it causes a registration frenzy and artificial demand.

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My marathon PR is "under three, high twos. I had a two hour and fifty-something."

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Obviously they have a deeply sensitive humanitarian side that wants to make things affordable for all the little guys and profits really are a horrible thing for them. They don't want to charge you too much for a race so it compromises your ability to buy your $15K bike or your $1000 wetsuit. They're trying to be more capitalistic, but it will just take time ......

Dave

I remember when it was $300 or less. And the first time I did IM Brasil, we paid the $300 in reais, which turned out to be about $150. Those were the days.

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clm
Nashville, TN
https://twitter.com/ironclm | http://ironclm.typepad.com

AH HA HA HAHA HA HAH AH AH...

Thanks for the good laugh...

Probably better to add a race than add to the existing entry fee, from a growth standpoint.

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Chris Harris

Maybe there's some relationship between the quantity demanded and the aura of a product that sells out quickly.

A very interesting question. I suspect a large part of this is risk related.

For example, let's say WTC increases fees at a race to $1000, but only 500 people register. They are stuck. They can't decrease the fees. The outcry would be insane and for every subsequent race potential racers would hold their registration back waiting for the price drop. And then they have left a lot of money on the table compared to a sellout (2000 or 2500) at $600 or $700. The far less risky path is to possibly give up a bit of revenue by having fees at a level you know will sell out. When you add on the other benefits that come from having a "sold out" race (planning for numbers of t-shirts and medals, food etc.) the risks of increasing fees to a level where registration levels become less certain pile up. Plus, you get almost a whole year to sell sponsors on a 2000-2500 person race, instead of a "500 maybe a 2000 person" race.

Far less risky to do what WTC is doing and gradually increase prices and add supply.

First come first serve. There are always IM foundation spots if you want to pay more.

First off, no there aren't. They sell out too. The only spots that remain open are the charity spots (need to raise at least $5K), Pro spots (I think) and of course Celebrity spots.

Which is what got me to thinking about this in the first place. It seems that the pecking order (excluding Pros and Celebrities), is:
1) Foundation Slots at double the price but 1/2 (?) goes to Charity.
2) Folks who were registered in the current race can line up to get in again, the day after the race. (I don't think they have to finish).
3) Volunteers go next, again the day after the race.
4) On-line registration goes next.

For popular IMs, I'm not sure that you reach #4. I also don't know if there are a set number of a foundation slots although I do know that they may not be available for very long. What I'm wondering is whether the Foundation Slots could take up all slots.

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BC Don
Pain is temporary, not giving it your all lasts all Winter.

I'm pretty confident that WTC has the economics of this one figured out.

Short-term, yes, they have pricing power. However, long-term, a change in price will alter consumer behavior. In this case, I suspect consumers would consume less (such as only doing one IM a season @ 1000 v. 2 IM at 600), or they would actively seek out alternatives such as Rev3. Long-term, WTC would run the risk of making the market more attractive to competitors who can undercut their price and be a viable alternative. They could also end up pushing people toward other less costly ultra endurance competitions such as ultra marathons or brevets.

Consider the type of vehicles that are popular now versus the types of vehicles that were popular in the early 1990's, a real world example of how increasing prices can drastically alter long-term consumer behavior. I would imagine it is safe to assume that WTC is already charging what they believe they can to maximize profit in both the short-term and the long-term.

Your #2 is slightly off.......Those who are signed up for this years race get to sign up for next years race the day BEFORE the race. They don't even have to start this years race to be able to sign up for next years race.

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Pink? Maybe. Maybe not. You decide.

The answer is the same as to why Apple does not raise the prices of its gadgets even though they probably could. It is because the value of selling out of a product so quickly is greater than the value of selling the product at a higher price. I.E. having people be excited to get a spot is more valuable than the marginal increase in dollars you would get from increasing the price. Its a long-term strategy that pays off over time.

People wouldn't sit outside Apple all day and night before a product was released unless they knew the product was scarce (i.e. they thought they might not get one if they didn't sit outside all night).

The very fact that the product sells out quickly actually causes the product to sell out even more quickly!

Except only a handful currently sell out in a matter of minutes.

Not counting Kona, I count 38 Ironman races.
5 currently sold out, 3 charity slots only, 30 open registration.

Probably they dont because they have customers who choose other races when their first choice is full. I am sure they know how many IM loyal customers will go to another location when they dont get the race they want.

There is also a saying in business where pigs get fat and hogs get slaughtered. Maybe they are just being pigs....

There must be a better growth formula to adding more locations which is their publicly stated strategy.

These are mutually exclusive.

Because they are growing, and buying competitors races. Once they have a lock on the vast, vast majority major races the price will increase a lot faster as they are the only gig in town. Then people will get tired of shelling out for triathlon, and once the Ironman brand has been wrung dry and triathlons are no longer 'cool' or seen as a massive undertaking for the average joe, it's shrivelled, dusty carcass will be tossed to the side of the road.

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Long Chile was a silly place.

WTC ought to try "dynamic pricing" for an event, similar to Northwestern's "purple pricing" (http://www.chicagobusiness.com/...ing-for-northwestern#).

For IM, it would work like this: Let's say there are 2,500 slots for a race. One year out, they would begin selling slots at rather high price - say, $1,500. Then, as each week passes, the price would drop until all 2,500 slots are filled. The price paid by the person who got the last slot would be the price all 2,500 registrants would end up paying. So, the other 2,499 would have some amount of money refunded.

Rather they should do an upsale pricing scheme.

All races are 400$. If you want:

- wetsuit strippers
- carrying your bike for you in t2 to your spot
- mike to announce your name
- finisher shirt / backpack
- finisher medal
- tattoo

add 50$ for each option. They should make more on their branding..

Doesn't necessarily mean price isn't high enough. Could be supply is too low. IM is an oligopoly so they are bound by game theory pricing.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

It varies by region, but in Australia this year has been the first time that IM entries are still available a few months out - Busselton still has spots for December 2014 and Melbourne still open for March 2015. This is the first time that these events haven't sold out 12 months in advance. So what has happened in Australia is they have increased the number of events (Busselton, Melbourne, Port Macquarie, plus competition from Challenge Cairns) rather than restrict events and increase the fees. Based on the current model it appears that increasing fees in Australia would be a bad idea as they appear to have reached a point where supply exceeds demand. Personally I think it's great there are more events to chose from and you are able to enter a few months out rather than having to enter a year in advance.

Pff tattoos are free at tough mudder.

Seems to me that over the last several years they've been very effective at doing both.